Behavioral Economics

Behavioural economics deals with human behaviour in economic situations. One conclusion drawn from this discipline is that people frequently act contrary to the widely-accepted model of man as homo economicus.

Behavioural economists have shown that the concept of man as homo economicus does not always correspond to the reality. Their experiments reveal systematic deviations from this image of the rational utility- and profit-maximizer: for example, people reward fair, and punish unfair, behaviour even at a cost to themselves. Behavioural economics investigates irrational behaviour and examines social norms, those forms of behaviour which are accepted by the majority of society. To this end, it combines traditional economic approaches with psychological methods.